Stock A has a beta = 0.8, while Stock B has a beta = 1.6. Which of the following statements is most correct?

Select one:

a. Stock Bs required return is double that of Stock As.

b. An equally weighted portfolio of Stock A and Stock B will have a beta less than 1.2.

c. If market participants become more risk averse, the required return on Stock B will increase more than the required return for Stock A.

d. All of the answers above are correct.

e. Answers a and c are correct.